S&P Global Ratings revised the outlook of Micron Technology Inc. to positive from stable, citing gains the U.S. chipmaker has made in operating performance and debt reduction that will help the company withstand an ongoing industry slump.
In response to the downturn, the company cut its fiscal 2019 capex plans by about $1.25 billion, according to S&P. In addition, the company has cash and marketable securities of about $7 billion as of Nov. 30 and full revolver availability of $2.5 billion, which could serve as liquidity support for the business, S&P added.
"[W]e expect Micron to deliver significantly lower yet still positive free cash flow in the range of $3 billion to $4 billion compared to the peak of over $8 billion in fiscal 2018," the rating agency said. "Given its manageable debt load, we expect the company to continue to deploy much of its free cash flows to shareholder returns instead of debt reduction."
As part of the ratings action, S&P affirmed Micron's issuer credit rating at BB+.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.